[i_k_k]

I’m not a huge fan of Uber’s corporate policies in general, but help me understand what’s wrong with this. Isn’t this what any company would do: maximize revenue from customers while minimizing expenses to their suppliers? Most businesses don’t tells us how they do this.

My grocer sells me a can of beans at some price. I have no idea how they arrived at that price, how much they paid their wholesaler, or that they may have a sale on beans next week. I buy or don’t buy beans based on whether I feel they’re worth the cost. And whether I feel like beans.

[jowea]

If I understand TFA correctly, what is going on, is that the grocer is going

* This person is wearing a suit, I'm going to charge double

* This is a regular that always buys the same thing every week, I can charge 30% more without breaking his routine

* This one is buying the ingredients for a recipe to do tonight, I can charge double more on one product because she won't want to go to another grocer just for one missing item.

Or in economic terms it is doing price discrimination to turn the consumer surplus into profit for itself. I think it's obvious why consumers wouldn't like that. Although they can also do "this one is a cheapstake with lots of free time, I have to offer a 20% discount to keep him coming"

[vjvjvjvjghv]

"* This is a regular that always buys the same thing every week, I can charge 30% more without breaking his routine"

This one is getting to me more and more. When I grew up, you got the best deals as a regular customer. Nowadays it's the opposite. Loyalty is something that can be exploited. If you don't switch insurance regularly, you are paying way too much. If you stay at a job for longer, you get paid under market. If you use a service regularly, you get charged more.

I think it's really corroding society when loyalty and trust are viewed as an exploitable weakness.

[pc86]

I don't think its as much "corroding society" as it is a symptom of scale and corporate consolidation.

The mom and pop store making $200k/yr revenue selling physical goods gives regulars a deal because if their $100/mo spend goes elsewhere it is a demonstrably negative business impact, and there are 2 or 3 other mom and pop stores close by. The owner's kids also probably go to school with the regular's kids or there's some similar relationship. Plus, even if they wanted to maximize profit - they probably don't based on the previous point - they simply don't have enough data points to figure out how exactly to do it.

The multinational corporation has billions or tens of billions in revenue, tens or hundreds of thousands of locations, and so many data points they can test any price discrimination scheme they want and get data almost instantly. But this by itself isn't a problem (IMO, certainly some here would disagree). The root of the problem IMO is that there's no relationship. The manager of the location has no power, the district manager is in a city an hour away, the people making these pricing decisions live in another state or country, and they are judged on making the graph go up and to the right. Their bonuses depend on it, their livelihood depends on it.

In the mom and pop scenario, the customer interacts with someone whose livelihood depends on them being happy and has the power to make sure they are. With the multinational, they interact with someone who doesn't give a shit if they're happy or not, and has no power whatsoever, and the lowest person with power doesn't have any idea who they are and is actively incentivized to screw them.

[netsharc]

Next: Cheapskate as a Service. Are you a cheapskate that can get discounts? Sign up on our app and use your "he gets great discounts" status to buy things for others, and earn a percentage of the savings!

[tcoff91]

With the way things are going, this isn’t even far fetched.

[garciasn]

We literally target advertisements in lookalike audiences based on behavioral profiling from on-site and in-store actions. It's been like this for more than a decade in my job; it's literally what I do for a living. But this has been happening with RFM direct mail for DECADES.

One major clothing retailer I worked with for 4+ years was big on promotions, particularly via direct mail. Those scratch-off coupons were not random; they were specifically targeted to individual customers based on their prior behavior.

For example:

- Customer A historically buys when they get a 30% coupon; test them with a 20% and see if they bite, but if not, give them the 30% and get some money.

- Customer B will always buy with almost ANY discount but never without one; give them the lowest one most of the time, but occasionally give them a higher one because it keeps them interested.

- Customer C will buy any time, but we need to keep them hooked so we send them the lowest one all the time.

---

I just don't know why people are surprised that this is happening at a bigger scale in app; it's baffling to me.

[0xffff2]

As someone who has no idea what a "scratch-off coupon" is, we could be surprised because we have no idea that this is going on at all at any level.

[dmurray]

Versions of this already exist with "this one lives in a low cost country, buys Steam games, Netflix subscriptions, (...) and shares them with family in high-cost country"

[i_k_k]

Love it!

[onlyrealcuzzo]

I think Uber sucks, but people keep using it, and seem to beg to differ.

I don't see what the problem is.

Presumably people are fine with getting "ripped off" by Uber, otherwise they wouldn't keep using Uber and paying for it.

It's not like it's some free ad-supported product that's a scourge on society where all the costs are hidden.

I avoid Uber at all costs, other people are happy to rely on it. To each their own.

Fun fact, it's very easy for apps to see what apps you have installed on your phone.

If you only have Uber installed on your phone, see what happens with future pricing when you install Lyft, Curb, Waymo, etc.

You don't even need to ever use them. Just have them installed.

[wiz21c]

> I don't see what the problem is.

The problem is most people don't know. In my country you can't change the price for a given person. So if you don't know it's done, you can't change your behaviour (like do legal actions).

[theturtletalks]

This is not the law in all places sadly. I read that restaurants in Japan give a different, cheaper menu to locals and more expensive menus to tourists. Most tourists don’t know and the restaurant doesn’t want to price out the locals.

[BobaFloutist]

Costa Rica the vast majority of tourist attractions have a resident price and a tourist price. I have mixed feelings about it -- on the one hand, it makes sense for a country reliant on tourism to charge tourists more, since tourists are much richer, and a lot of the money goes to ecological protection, research, the arts, etc. On the other hand, it's kind of a bummer for a nominally cheap country to have quite expensive museum and national park admissions - it's hard not to feel like you're getting screwed, and it's not an ignorable difference for my budget.

It's an interesting dilemma. Personally, I prefer the version of price discrimination where you introduce high-margin premium value-adds that people can opt in or out of - alcohol or steak/lobster at a restaurant, rooms with views or additional packages at hotels, table service, etc, which can allow wealthier customers to subsidize less wealthy ones without necessarily compromising the core service. Though that's still a bummer when adding a view to a room is prohibitively expensive for something that cost the hotel nothing more to provide, and you feel like either you're getting screwed or you'll always have an alleyway view from your hotel.

[mock-possum]

That just sounds like racism though - how do they tell who qualifies for the ‘local discount’ versus the ‘tourist premium?’

Betting it’s based on stereotypical appearance and language, not checking IDs.

A more charitable approach might be to charge an extra fee for foreign credit cards - that way you get to effectively upcharge tourists, while encouraging conversion to and payment by local currency, additionally saving yourself transaction fees in the process.

[pc86]

Japan specifically is extremely xenophobic, they actively discourage people from immigrating, they do not want foreigners there except as tourists. If you are not born in Japan, you can never become Japanese as far as the locals and the government are concerned.

It's kind of reductionist to take that environment and that culture and just default to "giving the white guy the expensive menu is racism." You'd have to do that to probably 1500 people before you hit the person who has actually immigrated as opposed to a tourist.

[theturtletalks]

I figured the same but wanted to give them the benefit of the doubt

[lenerdenator]

> Presumably people are fine with getting "ripped off" by Uber, otherwise they wouldn't keep using Uber and paying for it.

They're fine with it because of the lack of real alternatives. There's effectively a duopoly with Lyft in most cities. Duopolies usually don't present every customer with at least some sort of solution that allows for both parties in the business transaction to gain value.

Which is why taxis were a regulated industry before some cokeheads in SV decided things needed to be "disrupted".

[UncleEntity]

> I think Uber sucks, but people keep using it, and seem to beg to differ.

This sort of thing happens when you reach de facto monopoly status...

[haswell]

> Presumably people are fine with getting "ripped off" by Uber, otherwise they wouldn't keep using Uber and paying for it.

I’m not sure why we should presume people are “fine” with this just because it’s something that happens.

Plenty of things happen in this world that are not “fine” and make people upset, but continue to happen because of market forces, lack of reasonable alternatives, something being the “least bad” option, etc.

I think one of the most glaring issues is that Uber has established dominance in the category, which gives them power of their users and allows them to implement pricing strategies that are user-hostile with less chance of repercussions.

[heavyset_go]

You can't look at an economic transaction and deduce that parties involved were "fine" with it.

[troupo]

> It's not like it's some free ad-supported product that's a scourge on society where all the costs are hidden.

It is https://news.ycombinator.com/item?id=44378508

[swat535]

Right, people keep using Uber because it solves a real problem for them and provides convenience in their life.

If someone creates the same or better service at a more reasonable price, the consumers will switch. There is no vendor lock-in for Uber and no monopoly.

I don't see anything illegal going on here, just good old business.

[jagraff]

Groceries regularly do price discrimination (and have for a long time) via coupons. People mostly seem to be fine with it.

[rynohack]

Anyone can use coupons. Even if they don't want to spend the time to do it, they could. Same with store brand products made by the name brand manufacturer the choice is up to the consumer.

Uber's price discrimination is opaque. Even if they aren't doing dastardly things with it, people don't like feeling ripped off. We have no way of knowing when we are.

[Terr_]

Two huge differences:

1. The existence and mechanism of coupon programs is visible instead of secret.

2. They are not based on creepy individualized spy dossiers.

[LeafItAlone]

Coupons of yesteryear, maybe.

But most big box stores have moved to digital coupons that are indeed customized based on their creepy individualized spy dossier on you. At our grocery store, my partner and I get different coupons or even different deals for the same items.

[maxlybbert]

https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...

Hardly a new idea. And Uber didn’t create it, they just do it well.

[jowea]

Actually I may have a theory on why this is so annoying. Most people in Western countries are used to not haggling, and hate dealing with haggling for the two B2C products that are frequently haggled for, cars and housing, and frequently come out of the transaction feeling ripped off. And now Uber is trying to apply a faceless unilateral "take it or leave it" haggling process.

[jowea]

Yeah sure, but Joel Spolsky does point in this article how it pisses consumers off. And I think this sort of algorithm "pure" price discrimination based on mind reading how much the consumer is willing to pay is much more annoying than doing it by having cheaper and more expensive options.

[aunty_helen]

Your grocer doesn’t sell the next person a can of beans at a different price though. Hey nice watch, we have a 50% on discount for you.

I use uber a lot, I’m in one right now. My partners phone consistently gets cheaper estimates.

[abtinf]

Grocers run coupons and promos to help achieve price discrimination based on purchase timing preferences.

[cameldrv]

Some even have a coupon app and offer different deals to different people.

[freeopinion]

Challenge: Implement price discrimination in a setting where all prices are published on the shelf under the product without knowledge of who is viewing the price.

Possibility: Develop a "loyalty" program where customers provide a member id like a phone number at checkout. Anonymous shoppers get the worst pricing. Everybody else voluntarily signs up for price discrimination disguised as rewards.

[BobaFloutist]

Also the low-tech version: farmer's markets, bakeries, anything with perishables they sell daily will often give steep discounts or freebies if you show up close to closing, rewarding those that are in-the-know or are willing to modify their schedule to save some cash.

[HDThoreaun]

> Your grocer doesn’t sell the next person a can of beans at a different price though.

Yes they do. They even do everything they can to track me so they can optimize the coupons based on the watch I wear.

[kirykl]

If the retailer is in a monopoly position and the prices are not public it may be exploitative

[i_k_k]

I’d agree - but is it? Where I live (not a top-ten US metro area) we also have Lyft and a number of traditional cab companies. Uber is big, but by no means a monopoly.

[kirykl]

Yea I agree Ubers not a monopoly in many markets. Fixed taxi pricing would be the baseline alternative

[georgeecollins]

I was thinking the same thing! Also, I have a Lyft app on my phone right next to Uber. Most places I go are served by both customers. It's easier to switch than groceries.